PayPal Reportedly Freezes Funds Linked to Steam Adult Game Developer

A UK-based game programmer has claimed that PayPal has frozen approximately £80,000 in earnings due to their involvement in developing an adult-themed game published on Steam.

The programmer, who shared their experience on Reddit, said PayPal has withheld the money for over four weeks, citing a violation of its terms of service.

The dispute comes shortly after PayPal suspended certain currency transactions on Steam in July 2025. According to Steam Support, PayPal informed Valve that its banking partner would no longer process specific transactions, though no detailed explanation was provided. Many users suspect this move ties into ongoing crackdowns on adult content across digital platforms, with Steam being one of the most affected.

In the Reddit thread, the programmer explained that although their game complied with UK laws and was legally published on Steam, PayPal still froze their earnings.

The post read:

"They interviewed me and asked where it came from. I said it came from programming work I did for video games. They asked me where the games were sold, I said Steam. Then they asked me what specific game it was and demanded I link the store page. I linked the store page and when they realised it was an adult game they refused to release my money. They have also not refunded it to the lead developer either."

Interestingly, the sales of the game were not processed through PayPal directly, meaning customer purchases weren’t the source of the funds. However, PayPal determined the developer’s involvement in adult-oriented content was enough to breach its terms.

As per PayPal’s Acceptable Use Policy, the company prohibits transactions involving “certain sexually oriented materials or services,” especially digital content delivered online. While physical adult goods may be allowed in the U.S., digital adult content is banned globally. The policy also notes that enforcement decisions are made on a case-by-case basis, leaving room for interpretation.

The programmer also revealed that this isn’t their first clash with financial services. In past instances, traditional banks and app-based providers like Wise and Revolut shut down their accounts, forcing them to rely on PayPal. Ironically, they thought, this was supposed to be the “safer” option, but after more than a month with funds locked, the developer says they are now seeking legal advice and exploring alternative payment methods.